Market Barometer Shows Rate Decline Steady At 14 Percent

Soft market declines held steady for the second month in a row, as commercial insurance prices were down 14 percent on average in July, with property risks leading the way at minus-17 percent, an online insurance exchange reported.

Dallas-based MarketScout released its monthly "Market Barometer" for the property-casualty market, with July's average rate cut equaling June's 14 percent result.

The industry is now firmly entrenched in the 29th month of a soft market, according to Richard Kerr, chief executive officer of MarketScout.

However, he said some insurers are holding their rates and plan to '"sit on the sidelines" to protect their capital base and re-enter the market when pricing is more favorable.

"There are a small number of insurers who are refusing to accept there is a soft market and are not amending their business plan or forecasts. There may be some tough investor calls in the future for these companies," he said.

MarketScout reported that accounts of all sizes saw prices fall by double-digits, although small accounts were down 12 percent, while large and jumbo accounts fell 15 percent and 14 percent, respectively.

Of seven industry classes listed in the report, both manufacturing and habitational were down the most at 15 percent, with service down at 13 percent and the rest down 12 percent.

By coverage class, commercial property showed the sharpest decrease at 17 percent, while surety was down the least at 5 percent. Others on the extreme end were general liability, employment practices liability and umbrella/excess--all down 15 percent.

Fiduciary and crime were both down 7 percent, closely followed by commercial auto at 8 percent.